A decent standard of living

There's little argument about the minimum a human needs to survive—we know how much water, food, and shelter keep body and soul together. But a certain level of comfort above that has always been considered necessary for a "decent" standard of living. Just how much space there is between necessity and decency, though, is a social construction, and society's opinion changes all the time.

A while back, I wrote a piece on Our high, high standard of living, in which I made the point that what would have been considered a "middle-class" standard of living in the 1950s would be considered "living in poverty" today.

That piece prompted a lot of unhappy responses.

There were several who fixed on my claim that a family could get by—at that standard of living—on a single minimum-wage job, and tried to prove I was wrong by demonstrating that a minimum-wage job couldn't possible cover even the barest minimum of expenses. None of those people suggested moving to a cheaper part of the country as a way to make ends meet. Few of them stripped their supposed minimum budget of luxury items like private bathrooms and hot running water—which were by no means universal in the 1950s. Nobody mentioned being in a car pool (something which was very common in those days). Nobody mentioned moving in with their wife's parents.

The other unhappy responses, though, were from people who worried that providing perspective on just how high our standard of living was (compared to the 1950s) could be read as making the case that poor people aren't really poor, because they have color TVs and DVD players. (Apparently calling it "living in poverty" wasn't adequately clear.)

The thing is, there's no social consensus on what it takes to live at a "decent" standard of living. In fact, it's hard to even talk about, because people attack any specific proposal from both directions. Suggest that an expense is necessary to live a decent life, and people will delight in pointing out that a billion poor people around the world get by without (let's say) a refrigerator. On the other hand, chose to heat only one room of your house to minimize your contributions to global warming, and you might have a neighbor contact child protective services and call you an unfit parent.

Catherine's recent post on getting by on a six-figure income (together with its comments) vividly illustrates just how personally people take any suggestion that a particular category of expense is optional—or, contrariwise, that someone can do without it and still be considered to be living decently.

In my experience, talking about cars is the worst. People will brook no criticism of their motoring lifestyle. One of my first posts on Wise Bread made the mathematical case that its safer to live in a dangerous neighborhood than it is to have a long commute. Readers were outraged. Nobody disagreed with the math, they were just outraged. (I was amused that the suggestions Catherine saw for people trying to get by on $100,000 a year included "Drive cheaper cars," but apparently nobody suggested driving fewer cars or driving no cars.)

(I'm sure talking about children would be worse yet. There's no ceiling to how much money you can spend to give your kids "the best" and no touchstone for what's money well-spent.)

Social norms simply haven't kept up with the rapid rise in standards of living. The result is that there's no consensus on what's necessary to live decently. One person's necessity is another person's luxury, and one person's wild extravagance is another person's bare minimum for decent living.

There's a huge opportunity here for people to make their own decisions about what amounts to a decent standard of living. The key is: Do not buy into the cultural assumptions about what your particular income entitles you to—or accept that it obliges you to some particular lifestyle. Instead, make your own decisions about what standard of living you want, now and in the future. (And remember that a lower standard of living now gives you a higher standard of living later, due to interest and dividends from your savings and investments.)

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Guest #1

I agree with you 100%! Many people think our family is "poor." We have 19 year old car, the teenagers are not given a car and do not have a car until they turn 18 and buy their own. The kids carry their own lunch to school. And on and on. Let them think we're poor! I'm as happy as can be and trying to get rid of more and more stuff. And in the meantime, our savings account is growing and growing. People would be astounded to know what our wealth really is!!

This country is divided in so many ways now that drawing a hard line at any standard, especially wealth, is near impossible. I liked this article though I thought the conclusion best. I can only suggest that the word 'decent' might put some people off. But I think I understood the concept.

I think there is a lot of social pressure as to what is considered "normal" or a decent standard of living, which isn't really being decided by individuals but instead, corporations or media. That may sound a little conspiratorial for some, but the more I think about it, it's true. The messages filter down through advertising and soon, other people are lightly goading their peers into getting some new product. This past weekend I was convinced that an eHarmony universal remote would make my life better (I just bought one). Because I'm too lazy to handle four remotes?

The media also filters a lot of scary messages like the danger of urban neighborhoods (crime) and all kinds of exposes on hazards surrounding us, but not the right ones, because they aren't as sensational.

For instance I just read in the Economist an article on one study suggesting that SUVs seat belts actually do not make driving safer, because with larger cars and seat belts people think they're immune to danger and therefore drive more aggressively. Imagine that.

I would not be at all surprised to learn that living in an "urban" environment where there is supposedly more street crime, might be a wash compared to living 30 miles away from work and driving on a freeway.

Anyhow, getting back to your post - I think if we as individuals sat down and really, objectively looked at all the crap in our homes and thought about how much we use on a regular basis and really "need" - I'd say the majority of it could go, easily. Probably more.

As a broke college student, I had probably 10% of what I have now, and I actually was much more productive and I dare say, as happy then as I am now.

I thought it was funny that, according to the commentary, I was both living beyond my means and doing just fine. In fact, one person suggested that I should be able to relax and spend more. None of them were sitting down with my personal income and budget figures in front of them, and, interestingly, nobody showed much actual curiosity about what our actual spending was on particular budget items. Ultimately, it's impossible to compare actual numbers. There's too much variation in cost of living, as well as where you're going or where you're coming from. The closest comparison for my family is probably the family living right across the street from us.

I think there's this iconic "middle class" standard of living that most middle income families can't afford. I think the reason we are not more aware of it is that most people are living on debt. A lot of those material goods have been paid for with credit, which has been consolidated using home equity loans. Almost nobody pays cash for a new car. You can now get a seven year loan for a car! I wouldn't say that all credit and lending is bad, but if everyone had to pay cash for everything, I think we'd be seeing a lot of lifestyles that look like 1950's middle class instead of 2000's "middle class"--aka one car, smaller homes, fewer toys, etc.

I teach a World Poverty section in my class and I take a bit to go through all of the different things we as Americans buy that we deem necessary and compare it to people who are living below the $2 a day poverty line. There's both a stark realization that they don't need most of what they buy and a sudden tendency to get defensive about their buying habits that can take some time to defuse. They get upset and feel like you're picking on them for something that their whole society is doing.

I think automobiles are perhaps what get people the angriest. Suggesting that they don't need one while they're in college will prompt a lot of discussion.

That said, my wife and I are trying to slim down to one car and I'll admit that it's harder to accept the lack of utter freedom to get in your car when you wish. But anymore it's becoming apparent that that rare freedom we use costs us around $425 a month, which could easily pay for vacations and trips that we actually want.

Which you've neatly outlined with the words: I was amused that the suggestions Catherine saw for people trying to get by on $100,000 a year included "Drive cheaper cars," but apparently nobody suggested driving fewer cars or driving no cars.

I'm one of those who don't drive a car at all, not just for saving cash but also because I'm a bit of a eco-freak... And I always get berated by others for NOT driving, and if I suggest it, they scoff at me like I'm nuts for suggesting to drive less or not to drive at all, and take half an hour longer by taking the subway.

It's all about setting priorities of what you consider a decent standard of living (low commute? big house? prestigious neighbours?). It's all about your attitude towards what you have, not what you want/desire. I desire/want a lot of things and am envious of others, and it takes a long time (still working on it), to change my attitude.

I like to visit http://www.shorpy.com/ every day. When you see photos of 6-8 year old newsies, the pre-teen who lost his arm in the mine, the family of migrant workers who heard that there were jobs, you know that in general we have things pretty good.

The good news is if you don't care for your kids well, yes, someone is going to call Child Protection Services. The bad news is that it's hard to say what their limits are, and I suspect it depends on time of day, the day of the week, the phase of the moon, etc.

I can't find a link to a recent Macleans article discussing Ireland's definition of poverty. If I remember right, not being able to have a waterproof overcoat, two pairs of sturdy shoes, a roast joint once a week, meat or a vegetarian alternative every other day, etc. indicated poverty. I liked the notion, because they are culturally relevant, dependent upon the environment and seasons, and were appropriate to the country. The United States and Canada are quite a bit larger and more diverse, so any such indicators would have to be regional. And yes - our idea of poverty doesn't begin to touch the reality of millions in other countries. It is all about perspective.

I agree with your comments about the having one car or no cars. That can be difficult in some places though. I live in a college town in the midwest with no public transportation, no bike trails/lanes, and very few street lights. Not everything in the burbs is within walking distance. Luckily I live close enough to places that I don't have to drive if I don't want to, but not everyone is that fortunate.

poor people get benefits that middle class and working poor dont. go to a clinic; they won't take me but they come to my neighborhood and you'd think it was raining lotto winnings.

Guest #14

Excellent Post. To answer a question by one of the commenters.

How to get health insurance on minimum wage ? Although I believe this is just a sarcastic post, I will give him a serious answer based on actual facts.

Get a job at walmart. Yes, the evil empire. First, they pay better than minimum wage. A friend has worked there for 4 years, and makes 13 per hour. This store is always short handed and looking for employees. If you can pass the drug screen you have a job. People work there that are in their 80s, others are disabled and some are mentally handicapped.

This year he signed up for the big deductible health insurance and the health saving account plan. His insurance premium for a single is 10 per paycheck, 20 a month. For a family is is about 30 per check. These premiums are the same for everyone regardless of age or preexisting conditions. The company at the first of the year contributes 600 to his health savings account, and then matches dollar for dollar for another 600 per year. If he does not spend those contributions for the first year, he ends up with 1800 dollars in an interest bearing account. The high deductible is 2000 per year.

he also receives company contributions to a 401k and profit sharing each year even if he does not contribute a penny of his own.

After taxes and voluntary 401k contributions and HSA contributions he clears about 1450 per month. Total housing, (shared rent) food, utilities, cable, phone, gas, etc. is about 750 per month. So he has about 700 dollars free cash flow per month to do has he wishes, spend or save. He has an older car paid for in excellent condition that will last for many more years. His commute to work is less than 4 miles round trip.

This is an actual example of how you can in fact get along and even prosper on a low paying job today in this country.

Oh, yes, do take great care what you say to folks in regard to financing the kids' college education, and never mention that you worked your way through and so can they if they want it bad enough. (I do think Clark Howard at least agrees with me on this one).

I'm very comfortable with my life choices and finances but was sad to find out that my income level might be considered close to poverty, what a shock, yikes. But carrying almost no debt is just wonderful, and I feel sorry for those who don't understand that. At my age, I don't envy people their "nicer" things. And what a shame neighborhoods are allowed to deteriorate. Too bad not enough smart younger people aren't starting off there (buy a mean dog, ha-ha). The opportunities are certainly still out there in this country if you're not afraid to venture outside the box.

When my parents married in 1946 (at ages 29 and 21), they lived on the farm with my father's parents. They lived there until they were able to buy the farm from my grandparents, at which time my grandparents moved into a different house. This worked well for several reasons, including but not only: My mom (mother of 12 kids) had help with all the babies; my grandparents had continued help from their only son; my parents learned to manage a farm before they had to do it on their own.

I'm not advocating that people move in with their in-laws. That's obviously a very personal decision; only the people directly involved could possibly know if it was the right choice or not.

I'm just saying that it was a perfectly ordinary thing for people to do through most of human history. The fact that many people nowadays can graduate from college and then set up housekeeping on their own as a single person is just one way in which our standard of living is vastly higher now than it was before. Until very recently, only wealthy people could do that. Now we're almost all wealthy, by historical standards.

'Things' don't matter a hell of a lot ... I should know, I have a lot of them (all paid for with cash). But, I didn't start out to get 'things' ... I started out by trying to build a life.

It's what I write about on my blog (figuring out your life, then finding the money to make it happen):

For some people, building a life means surfing all day (you can live on, say, idyllic Byron Beach in Australia for virtually nothing) or meditating in an ashram. Money and possessions are virtually irrelevent for them.

Unfortunately for me, my dream was for a life filled with phyical, spritual, emotional, and intellectual travel ... I costed that at $250k a year (do the sums, that means $5M - $10M in the bank). Again, it's not the 'things' but the free time and the free cash required that drove me to achieve my goals.

Most people's goals are likely to fall somewhere between the two ... just make sure that 'things' aren't a part of that goal.

hmm Walmart didn't hire me. Went through a couple interviews (in a row, same day) then nothing. Don't know what they found wrong with me, but I'm as far from a druggie as you can get (not that I got far enough in the process for a blood test)
We were just discussing a bit about this in the Sociology course I'm taking tho, and there were 2 students that work at Walmart, plus one that's mother just quit there. They all said the minimum insurance they can get - for just them, no kids/family - cost them $45 a week (don't know what the difference would be from the above comment... state lived in??), and one of them said they just couldn't afford that, the other said she barely can and has a kid she can't afford to add to it.
So, um no, Walmart isn't the answer to minimum wage health coverage for everyone.

I'd think that hiring needs at Wal Mart would depend on which Wal Mart, right?

I've worked pt at Borders, where you can get health insurance as a pt employee. I loved that job.

I'm constantly trying to school myself to recognize what I actually want v what seems to pop up on the internal feed--you know, the "oooh, I want a Bowflex/card table/nifty gadget" instinct, just because there it is in front of me. Advertising is powerful and scary.

When I bought a home a year ago, I really resisted buying a semi-detatched with no garage. Why? Because "people" don't like them as well. Well, that's what I could comfortably afford, and I actually love the setup. Love the neighbors, love the neighborhood. The really funny thing here? I DON'T OWN A CAR. Caring about a garage was nuts.

Regarding the question of health insurance on minimum wage, and the insurance cost for health insurance at walmart, I did recheck what I had posted earlier and compared it to the 2008 insurance cost my friend is paying. The figure of about 10 dollars per each paycheck is correct. That is for high deductible insurance, and it is the same rate for all employees of this company countrywide except, he thinks, for California, which apparently has a different health care structure.

Regarding the post of health insurance costing 45 dollar "per week" at walmart, the employees of walmart are paid every two weeks, and insurance is deducted from that, there is really no "weekly" insurance rate.

Walmart, as with most big corporations, offers multiple levels of health insurance coverage and premium levels. The single rate for the high deductible coverage is the amount I stated. If an employee wants a low deductible and the widest choice of medical choices, then the premium is higher. Of course the premiums are also higher for additional family members on the coverage, but are still pretty low with the high deductible plans.

So the answer does remain that an individual could have health insurance coverage on walmart wages. From talking with a number of employees at the local store, many do have the insurance, some say they cannot afford it, but they drive almost new cars, and one is in Vegas this week on vacation, so I quess you makes your choice and pays your money.

As I said in the earlier post, walmart at the local store does not pay minimum wage, about 9 dollars per hour is the lowest, for a cashier, and they cannot fill all their jobs. About every time I'm in the store, I'm asked if I want to hire on. I don't, although I have sure worked at worse places of employment over my life.

This wage level appears to be common across this area,three states, and still most stores are unable to get the staffing they want. They will hire just about anyone, regardless of capabilities, although I will say I have not seen any employees that are wheelchair bound, so I guess there may be a restriction on that.

Sorry, I meant per paycheck, not per week. But this was 3 people giving the same figures, I think if one had said $45 and someone else knew of a lower they'd have said "No, you can get it lower!" instead of speaking in agreement on the subject. They also only make $7 and some change an hour (my brother worked there less than 2 weeks before getting a better job, he was making $7.35, so in line with what my classmates were saying)... People in areas where they get $2 more per hour wouldn't feel the hurt of the money coming out of the check quite as much.
I'm in rural Indiana btw In an area where there's tons of people clamoring for each job position that opens.

I just checked with my brother on something that I thought: he actually did get paid weekly. This is NOT the same Walmart my classmates work at - different town/county. Every job I and my brother have had since we moved to this county has paid weekly, including temp services, so we figure there must be some weird local law about paychecks being weekly.
I think that no matter what Walmarts corporate policies are, they have to bend them for some localities (and probably take advantage of situations in some areas...). I wouldn't possibly expect a business to be able to do the exact same thing across the board in this very large and varied country of ours.
Another issue I've heard about at the local Walmart is being able to get enough hours. Some of the friendly/talkitive cashiers complain about being sent home early, or getting fewer schedules hours some weeks... If you can't count on 40 hours, or at least a set amount of hours, it's hard to be prepared to have a chunk taken out of your check. I don't know if that's an issue at the one near my school, but it wouldn't surprise me.

When my hubbie and I first shacked up we rented a place for $275 a month. We had no furniture except for a bed and dresser, so the living room could be politely described as barren. We had no car. We had no phone. We had no appliances except for the stove and frig. We also didn't have heat or air. What we had were lots and lots of potatoes - mostly fried and sometimes with an onion. We didn't have to walk to school, up hill, in the snow, both ways though. We were lucky like that.

Over time we've managed some furniture, a car, and even a phone, though I hate it and rarely answer it. So, don't bother calling. My point is that I get that we *could* live in misery to sock away cash, but I much prefer my current creature comforts admittedly afforded to us debt-free by years of denial. Many days I thought about the regret I would feel if I died cold.

I might be a hard ass and point out that people could apply the 1950s model of misery. I've done it including a 6 mo stint with the in-laws. What I don't get is suggesting an expensive move across country where the cost of living is lower, and perhaps the standard of living as well. These places usually have depressed economies that can't support their current residents. Would you really leave your family, friends, support systems and all that is familiar to live in a county that only recently was routed for 911 service but didn't yet have telephone service?

You wrote more than once about how offended people are when you suggest that we see things as "needs" that are really "wants". I agree, so it didn't seem like I needed to address it.

I had a co-worker in a financial bind who was renting furniture. She was complaining about it to me when I suggested she get rid of the furniture. My thinking was that she could use that money to buy some quality used furniture that she could keep. Once the living room was furnished, then she wouldn't have any furniture costs at all as part of her monthly budget.

It got personal REAL QUICK with her accusing me of all kinds of hateful things. I can't tell you how surprised I was. Having lived at that point for five years with no living room furniture (as I mentioned in my previous comment), I thought nothing of going without a couch.

Poverty gets mixed in with race, geography, and other deep identity issues. To complicate matters, it seems as though the way we look at poverty has changed. We aren't looking at income so much as we are standard of living. That being the case, it can feel like an insult to suggest that someone should lower their standard of living, as though they don't deserve what others have, to bring it in line with their income.

Obviously, my philosophy is more in line with yours, but I have tried for some time to puzzle this out so that I could put that one experience of mine in a context that makes sense.

Guest #27

I had the same experience. No good deed goes unpunished, they say and it's true.

Sad.

Saving #28

When I look back at my high school days I am always surprised with the financial decisions my friends have made over the subsequent years. High school is a great leveler. Almost every student is poor. However once you earn your own money you quickly find out what your friends attitude to money is.

I personally haven't really increased my spending since my first job. It really has made an incredible difference to my wealth. After 7 years I can start to the see what a difference compound returns make.

On the other hand I've got a bunch of friends who spend like no tomorrow. One recently complained to me about rising interest rates. He's got a massive mortgage in a nice suburb. When I told him he should think about saving and having a savings buffer he took offense. The next topic of conversation was about his next overseas ski trip. Changing his lifestyle was a personal affront to him. The problem is that if he doesn't spend less his wife can't quit work to have a kid. I see relationship problems up ahead.

Another friend has a massive mortgage too. Him and his wife have good incomes but possibly not stables ones. She's in banking (not good to be in now) and he's a contractor. With the economy not looking good he now wants to get an imported sports car. It doesn't help he's gadget crazy as well. I suspect he too does not have much of a savings buffer.

One thing I would like them to understand is that long term interests rates are likely to rise in the next couple of years. I know it is low now but over the long run it is unsustainable. In general terms low interest rates (and savings rates) cause inflation. Foreigners have largely keep interest rates low by lending to us. Eventually that will end once they realise they are constantly paid with a devaluing currency. It is likely my friends will be brutalized with high interest rates. I only wish they knew what kind of financial hole they are digging for themselves.

I'm sure when auto loans and unsecured credit become as difficult to obtain as mortgages are becoming that there will be a shift in the average conception of need and want. Up till then, I swear people have been going by what's on the television. That said, inflation-adjusted wages have been stagnant since the 70s or something. That can't be sustainable as essentials like healthcare become a greater drag on family finance. We can agree that basic healthcare is an essential, right?

My neighbors have two 1980s era Nissans they use as regular commuters. These things must have paid for themselves like ten times, now. I'm jealous... my snazzy little 2000s era Volkswagen broke down at 60k and with $6000 still owed. Learned my lesson...

I am one of those with no car. In fact, at age 30 I have never owned a car and have never even had a driver's license. However, I have deliberately made choices that make it easier for me to do without this major expense. One of my most important criteria when looking for an apartment is ease of getting around without a car. I live close to public transportation and not too far from downtown (where I work). My neighbourhood has supermarkets, drugstores, banks, etc. within walking distance. I might pay less for a bigger apartment in the suburbs, but I wouldn't be very able to do without a car so it's no contest.

Health care is a special case, in that it's an exception to the "keep body and soul together" rule.

There are two reasons for this. First of all, the amount of food, water, shelter, etc. that a person needs are pretty uniform. (A large man needs more than a petite woman, but food is cheap enough that we can just set the ceiling to cover even growing teenagers and everyone will be okay.) That's not true about health care--a young, healthy adult needs almost no care at all, while a very sick person can burn through almost unlimited amounts.

And that "unlimited" is the other part of the difference. The only ceiling on how much spending is necessary to keep body and soul together when it comes to medical care is that some people die no matter what you do.

These difference make it hard to include medical care in the same conversation as one about other necessities.

On the subject of Volkswagans, I just want to say that I really liked my 1983 VW GTI, which lasted me 17 years. My wife's Honda Civic, though, has turned out to last even better (18 years so far) and is a lot cheaper to keep running.

Most people don't understand the advantages of car-free living. The notion that you "need" a car drives everything about the way people live and work, because once you buy into that, it seems perfectly reasonable to put the homes over there and the workplaces over here and the shopping way out that way. It's really insane.

It takes keen insight and a willingness to go against the crowd to opt out of the motoring lifestyle, but the payoff is huge. People talk about how having a car gives you freedom, but it's nothing like the freedom that comes from being able to do work that you love, even if it doesn't pay enough to cover insurance, taxes, fuel, and a car loan.

A terribly interesting book (that I don't see mentioned in this discussion) is "The Progress Paradox" by Gregg Easterbrook. It outlines why Americans feel so let down by the current state of affairs, but in fact, Americans have seen an incredible increase in standard of living in the last 50 years.

There was a time, not too long ago, when middle class was defined as having "one TV and one car per household". MIDDLE CLASS. I would think that there are many, many people living near the technical definition of poverty that would possess these two things.

As the price of goods has fallen, we only see the financial equivalent of our material possessions, not the overall benefit they bring to our lives. When TVs were $1000 a pop, we felt better about owning one. Now that I can buy a 20" LCD TV for $299 or less, I don't feel quite so fortunate to own a TV. Yet the benefit it brings to my life is the same, no matter what I had paid for it.

Just happened onto this older post via Wisebread. I suggest some of your readers make friends with people from other countries. My best friend is from Germany and my husband's parents are from Europe. And boy, has my mindset changed in the years (over a decade) that I have known them!

In Germany, I could find NO paper napkins. There were not gift bags because they would be horrified at delivering a gift in such a manner! Now, I am not saying anyone should adopt these methods - I just want to illustrate that both cultures look at "standards" very differently. Even with the smallest of details.

My husband and I no longer buy paper napkins. We bought nice cloth ones which I was regularly. While I do adopt this "European" idea, it does have a very American twist. I do NOT iron my napkins to make them perfect :) They are folded nicely in a drawer and are used for daily use. I have another set for special occasion which do get ironed periodically.

I like their smaller houses (less cleaning time) less isolation (no places for family members to hide away) and more time outside (nice table cloth on the cheap white table on the small balcony). Instead of meeting friends out at a restaurant, we have a wonderful ambiance on our deck with tablecloth and washable napkins. I love my "standard" of living that we have created by combining American attitudes and importing a few European touches. More time hanging out with friends, less time with the TV. I find the pace relaxing.

This has caused us to analyze what we really "need" in our lives to be happy. Got rid of cable, we live with just one car (used and no payments), and eat out less. I'm sure I'll find more places to cut next year. We're even considering a smaller home - but maybe have it on nice acreage.